Is the Stage-Gate process consistent with suggestions that firms adopt parallel processes? What impact do you think using Stage-Gate processes would have on development cycle time and development costs?
> Consider a government training program that provides low-skilled men job-specific training. To evaluate this program, members of the target population were randomly assigned to either a treatment group that was eligible to receive services under the prog
> Imagine a wilderness area of 200 square miles in the Rocky Mountains. How would you expect each of the following factors to affect people’s total willingness to pay for its preservation? a. The size of the total wilderness area still remaining in the Roc
> In exercise (3) the optimal strategy involved testing. Does testing remain optimal if the prevalence of the disease in the population is only .05? Does your answer suggest any general principle? Data From exercise 3: The prevalence of a disease among a
> Imagine that a rancher would have an income of $80,000 if his county remains free from a cattle parasite but only $50,000 if the county is exposed to the parasite. Further imagine that a county program to limit the impact of exposure to the parasite woul
> An analyst wishing to estimate the benefits of preserving a wetland has combined information obtained from two methods. First, she surveyed those who visited the wetland - fishers, duck hunters, and bird watchers - to determine their willingness to pay f
> Imagine that we want to value a cultural festival from the point of view of a risk-averse person. The person’s utility is given by U (I) where $I is her income. She has a 50 percent chance of being able to get vacation time to attend the festival. If sh
> A large rural county is considering establishing a medical transport unit that would use helicopters to fly emergency medical cases to hospitals. Analysts have attempted to estimate the benefits from establishing the unit in two ways. First, they surveye
> Two alternative mosquito control programs have been proposed to reduce the health risks of West Nile disease in a state over the next five years. The costs and effectiveness of each program in each of the next five years are displayed below: Alternativ
> The prevalence of a disease among a certain population is 0.40. That is, there is a 40 percent chance that a person randomly selected from the population will have the disease. An imperfect test that costs $250 is available to help identify those who ha
> Use several alternative discount rate values to investigate the sensitivity of the present value of net benefits of the dam in exercise (1) to the assumed value of the real discount rate. Data from exercise 1: The initial cost of constructing a permanen
> The initial cost of constructing a permanent dam (i.e., a dam that is expected to last forever) is $830 million. The annual net benefits will depend on the amount of rainfall: $36 million in a “dry” year, $58 million in a “wet” year, and $104 million in
> Imagine that the current owner of the land in the previous exercise was willing to sell the land for $2 million. Assuming this amount equaled the social opportunity cost of the land, calculate the net benefits if the county were to purchase the land as a
> Assume a project will result in benefits of $1.2 trillion in 500 years by avoiding an environmental disaster that otherwise would occur at that time. a. Compute the present value of these benefits using a time-constant discount rate of 3.5. b. Compute t
> Assume the following: Society faces a marginal excess tax burden of raising public revenue denoted METB; the shadow price of capital equals θ; public borrowing displaces private investment dollar for dollar; and public revenues raised through taxes displ
> An analyst for a municipal public housing agency explained the choice of a discount rate as follows: “Our agency funds its capital investments through nationally issued bonds. The effective interest rate that we pay on the bonds is the cost that the agen
> The following table gives cost and benefit estimates in real dollars for dredging a navigable channel from an inland port to the open sea. Dredging and Savings to Value of Pleasure Year Patrol Costs ($) Shippers ($) Boating ($) 0 2,548,00
> A country imports 3 billion barrels of crude oil per year and domestically produces another 3 billion barrels of crude oil per year. The world price of crude oil is $90 per barrel. Assuming linear curves, economists estimate the price elasticity of domes
> The environmental protection agency of a county would like to preserve a piece of land as a wilderness area. The current owner has offered to lease the land to the county for 20 years in return for a lump-sum payment of $1.1 million, which would be paid
> CBAs have been conducted of six proposed projects. None of these projects are mutually exclusive and the agency has a sufficient budget to fund those that will make society better off. The findings from the CBAs are summarized here in millions of dollars
> A town’s recreation department is trying to decide how to use a piece of land. One option is to put up basketball courts with an expected life of 8 years. Another is to install a swimming pool with an expected life of 24 years. The basketball courts woul
> A government data processing center has been plagued in recent years by complaints from employees of back pain. Consultants have estimated that upgrading office furniture at a net cost of $430,000 would reduce the incidence and severity of back injuries,
> A highway department is considering building a temporary bridge to cut travel time during the three years it will take to build a permanent bridge. The temporary bridge can be put up in a few weeks at a cost of $730,000. At the end of three years, it wou
> Imagine that a project involves putting a high-voltage power transmission line near residential property. Discuss how you might predict and monetize its impact on residents.
> Review the following CBA: David L. Weimer and Mark A. Sager, ““Early Identification and Treatment of Alzheimer’s disease: Social and Fiscal Outcomes,” Alzheimer’s & Dementia 5(3), 2009, 215-226. Evaluate the empirical basis for prediction and monetizatio
> A proposed government project in a rural area with 100 unemployed persons would require the hiring of 20 workers. The project would offer wages of $12 per hour. Imagine that the reservation wages of the one-hundred unemployed fall between $2 and $20. R
> (Instructor-provided spreadsheet recommended) Consider an individual’s utility function over two goods, qm and qs, where m indicates the primary market in which a policy will have its effect and s is a related secondary market: Where α, βm, βs, and γ a
> Suppose the government is considering an increase in the toll on a certain stretch of highway from $.40 to $.50. At present, 50,000 cars per week use that highway stretch; after the toll is imposed, it is projected that only 45,000 cars per week will use
> Assume that a typical unskilled rural worker in a developing country would be paid 2 dubyas a week if he migrates to the city and finds a job. However, the unemployment rate for unskilled workers is 40 percent in the city. Required: a. What does the Ha
> Consider a low-wage labor market. Workers in this market are not presently covered by the minimum wage, but the government is considering implementing such legislation. If implemented, this law would require employers in the market to pay workers a $5 ho
> A city is about to build a new sanitation plant. It is considering two sites, one located in a moderately high-income neighborhood and the other in a low-income neighborhood. Indeed, most of the residents in the latter neighborhood live below the poverty
> What are some of the advantages of technological innovation? Disadvantages?
> Why is innovation so important for firms to compete in many industries?
> Why do you think so many innovation projects fail to generate an economic return?
> The Walt Disney Company is probably the best known entertainment company in the world. Founded in 1923 as a producer of animated films, it grew to become an entertainment conglomerate that includes theme parks, live action film production, television, pu
> Founded in 2003 by Rick Alden, Skullcandy grew from a simple idea to a company with products distributed in approximately 80 countries and generating over $200 million in revenues annually. The company’s core products, headphones with an extreme sport ae
> Google was founded in 1998 by two Stanford Ph.D. students, Sergey Brin and Larry Page, who had developed a formula for rank ordering random search results by relevancy. Their formula gave rise to an incredibly powerful Internet search engine that rapidly
> In 1995, Edward Lanphier founded Sangamo Biosciences for the purpose of developing zinc-finger nucleases (ZFNs), a new technology that offered potential for “editing” the genetic code of a living individual to correct
> Mahindra Tractors, the Farm Equipment Sector of the Mahindra & Mahindra Group in India is one of the world’s largest producers of tractors.a In the late 1990’s, over 20 percent of Indian’s gross domestic product came from agriculture and nearly 70 percen
> What are the benefits and costs of involving customers and suppliers in the development process?
> Gavriel Iddan was an electro-optical engineer at Israel’s Rafael Armament Development Authority, the Israeli authority for development of weapons and military technology. One of Iddan’s projects was to develop the “eye” of a guided missile, which leads t
> In the global video game industry, the introduction of each generation of console has ushered in a new battle for market dominance. New entrants have made startling entrances and toppled seemingly invincible incumbents. Game developers, distributors, and
> What are some of the advantages and disadvantages of co-location? Are there some types of projects for which “virtual teams” are inappropriate?
> Can you identify an example of a development project and what type of team you believed they used? Do you think this was the appropriate type of team given the nature of the project?
> What are some of the ways that managers can ensure that a team reaps the advantages of diversity while not being thwarted by some of the challenges team diversity raises?
> Why are there tradeoffs in choosing a team's size and level of diversity?
> What kinds of people make good project champions? How can a firm ensure that it gets the benefits of championing while minimizing the risks?
> Are there some industries in which a parallel process would not be possible or effective?
> Consider a group project you have worked on at work or school. Did your group use mostly sequential or parallel processes?
> What are some of the advantages and disadvantages of a parallel development process? What obstacles might a firm face in attempting to adopt a parallel process?
> What factors do you believe influenced the choice of protection strategy used for the innovation identified above? Do you think the strategy was a good choice?
> What are some of the advantages and disadvantages of the transnational approach advocated by Bartlett and Ghoshal?
> Why is the tension between centralization and decentralization of R&D activities likely to be even greater for multinational firms than firms that compete in one national market?
> What factors should a firm take into account when deciding how centralized its R&D activities should be? Should firms employ both centralized and decentralized R&D activities?
> What are some of the advantages and disadvantages of having formalized procedures for improving the effectiveness or efficiency of innovation?
> Are there particular types of innovation activities for which large firms are likely to outperform small firms? Are there types for which small firms are likely to outperform large firms?
> Describe a technological innovation not discussed in the chapter, and identify where you think it lies on the control continuum between wholly proprietary and wholly open.
> Can you identify a situation in which none of the legal protection mechanisms discussed (patents, copyrights, trademarks, trade secrets) will prove useful?
> When will trade secrets be more useful than patents, copyrights or trademarks?
> Consider a firm that is considering marketing its innovation in multiple countries. What factors should this firm consider in formulating its protection strategy?
> What marketing strategies are used by the producers of the product you identified for question 3? What are the advantages and disadvantages of these marketing strategies?
> What are the differences between patents, copyrights, and trademarks?
> Are their some industries in which you would expect to see particularly short technology cycles? Are their some industries in which you would expect to see particularly long technology cycles? What might be some of the factors that influence the length o
> Will different methods of evaluating a project typically yield the same conclusions about whether to fund its development? Why or why not?
> If a firm decides it is in its best interest to collaborate on a development project, how would you recommend the firm go about choosing a partner, a collaboration mode, and governance structure for the relationship?
> What are some of the reasons that a firm might use both qualitative and quantitative assessments of a project?
> How does the mode of collaborating (e.g., strategic alliance, joint venture, licensing, outsourcing, collective research organization) influence the success of a collaboration?
> What are some of the advantages and disadvantages of collaborating on a development project?
> Identify a particular development project you are familiar with. What kinds of methods do you believe were used to assess the project? What kinds of methods do you believe should have been used to assess the project?
> For what kind of development projects might a real options approach be appropriate? For what kind of projects would it be inappropriate?
> What are the advantages and disadvantages of discounted cash flow methods such as NPV and IRR?
> Pick a product you feel you know well. What intermediaries do you think are used in bringing this product to market? What valuable services do you think these intermediaries provide?
> How is the idea of “strategic intent” different from models of strategy that emphasize achieving a fit between the firm’s strategies and its current strengths, weaknesses, opportunities and threats (SWOT)?
> What determines whether an industry is likely to have one or a few dominant designs?
> Why is it necessary to perform an external and internal analysis before the firm can identify its true core competencies?
> What makes an ability (or set of abilities) a core competency?
> What is the difference between a strength, a competitive advantage, and a sustainable competitive advantage?
> Are dominant designs good for consumers? Competitors? Complementors? Suppliers?
> What factors might make some industries harder to pioneer than others? Are there industries in which there is no penalty for late entry?
> Can you think of an example of a successful a) first mover, b) early follower, and c) late entrant? Can you think of unsuccessful examples of each?
> What are some of the advantages of entering a market early? Are there any advantages to entering a market late?
> What are some of the ways a firm can try to increase the overall value of its technology, and its likelihood of becoming the dominant design?
> What factors will (or should) influence a firm’s pricing strategy?
> What are some examples of industries not mentioned in the chapter that demonstrate increasing returns to adoption?
> What are some of the sources of increasing returns to adoption?
> Why do technologies often improve faster than customer requirements? What are the advantages and disadvantages to a firm of developing a technology beyond the current state of market needs?
> What are some of the reasons that both technology improvement and technology diffusion exhibit s-shaped curves?
> Are well-established firms or new entrants more likely to a) develop and/or b) adopt new technologies? What are some reasons for your choice?
> What are some of the reasons that established firms might resist the adoption of a new technology?
> Could firms identify people with greater capacity for creativity or inventiveness in their hiring procedures?
> Several studies indicate that the use of collaborative research agreements is increasing around the world. What might be some of the reasons that collaborative research is becoming more prevalent?
> What traits appear to make individuals most creative? Are these the same traits that lead to successful inventions?
> What are some of the advantages and disadvantages of a) individuals as innovators, b) firms as innovators, c) universities as innovators, d) government institutions as innovators, e) nonprofit organizations as innovators?
> Can you identify one or more circumstances when a company might wish to delay introducing its product?
> The Medical Committee for Human Rights (Committee), a nonprofit corporation organized to advance concerns for human life, received a gift of shares of Dow Chemical (Dow) stock. Dow manufactured napalm, a chemical defoliant that was used during the Vietna
> M.R. Watters was the majority shareholder of several closely held corporations, including Wildhorn Ranch, Inc. (Wildhorn). All these businesses were run out of Watters’s home in Rocky Ford, Colorado. Wildhorn operated a resort called the Wildhorn Ranch R
> Edward Hellenbrand ran a comedy club known as the Comedy Cottage in Rosemont, Illinois. The business was incorporated, with Hellenbrand and his wife as the corporation’s sole shareholders. The corporation leased the premises in which the club was located
> Southland Corporation (Southland) owns the 7-Eleven trademark and licenses franchisees throughout the country to operate 7-Eleven stores. The franchise agreement provides for fees to be paid to Southland by each franchisee based on a percentage of gross
> Christopher, Melony, Xie, and Ruth form iNet.com, LLC, a limited liability company. The 4 members are all Ph.D. scientists who have been working together in a backyard garage to develop a handheld wireless device that lets you receive and send email, sur
> Angela, Yoko, Cherise, and Serena want to start a new business that designs and manufactures toys for children. At a meeting in which the owners want to decide what type of legal form to use to operate the business, Cherise states: We should use a limite
> Fruehauf Corporation (Fruehauf) is engaged in the manufacture of large trucks and industrial vehicles. The Edelman group (Edelman) made a cash tender offer for the shares of Fruehauf for $48.50 per share. The stock had sold in the low $20-per-share range
